Task: This is a take home exam with a prescribed release date and only limited time to complete. You...

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Task: This is a take home exam with a prescribed release date and only limited time to complete. You have been presented with a scenario (below) and after the fact scenario there are two (2) questions based on the scenario which require you to research the issues, apply relevant taxation law principles and draw consistent conclusions. Both questions are compulsory. Refer: • Taxation Law Learning Guide for details of Criteria and Standards for marking processes. • Take Home Exam FAQ for further information on the assignment including word limits, citation standards and ways to argue. • NB: the FAQ together with the Learning Guide and this Assignment must be read in conjunction with one another. Please also check the Discussion Board on vUWS under the assignment tab to ensure you haven’t missed relevant information before asking your unit coordinator a question! Length: 1500 words1 Value: 20% of your total assessment (it is out of 20 Part a is worth
	
Document Preview: Taxation Law Take Home  Autumn 2017 
 
Take Home Exam Fergal Ferguson 
Task: 
This is a take home exam with a prescribed release date and only limited time to complete.   
You have been presented with a scenario (below) and after the fact scenario there are two (2) 
questions based on the scenario which require you to research the issues, apply relevant 
taxation law principles and draw consistent conclusions.  Both questions are compulsory.   
Refer:  
• Taxation Law Learning Guide for details of Criteria and Standards for marking 
processes.  
• Take Home Exam FAQ for further information on the assignment including word 
limits, citation standards and ways to argue.  
• NB: the FAQ together with the Learning Guide and this Assignment must be read in 
conjunction with one another.  Please also check the Discussion Board on vUWS 
under the assignment tab to ensure you haven’t missed relevant information before 
asking your unit coordinator a question!   
Length:  
1
1500 words 
Value:  
20% of your total assessment (it is out of 20 Part a is worth 15 marks and Part B 5 marks) 
 
Due Date:  
Monday 24 April by 17:00 hours (5PM) via Turnitin Only.  Please see FAQ and vUWS 
for further information about use of Turnitin for assignment submission. 
                                                 
1
 Headings, footnotes and calculations are not part of the word count unless your footnote contains more than a 
reference.  So a reference to legislation or a case in a footnote does not count in your word count.  If it contains 
text (e.g. like this footnote!) then those words must be counted in your word count – see the FAQ for detailed 
discussion on word count.   
 1Taxation Law Take Home  Autumn 2017 
Fact Scenario 
Fergal Feguson is a fitter and turner (a machinist) employed in a local factory, his salary is 
$79,500 per annum.  Fergal is also a keen athlete.  Ever since he was a teenager Fergal has 
been involved in a wide variety of local sports such as soccer,...

David · Accepted Answer

1 
 
Part A. 
The term “enterprises” is often used to refer to entities in ABN and GST. This term covers 
commercial activities carried out with an intention of earning profits (form of constitution is not 
a decisive factor) but does not include hobbies or employment. Business is said to be carried on 
when any activity pertaining to start, promote, run, continue or close a business is performed. 
The money that a business has earned forms the part of the income assessable to tax for the 
taxpayer in Australia and this is the reason why there is a debate is any activity is a business of 
not. However, one can claim certain deduction for expenses that are incurred by him in earning 
that income. 
Factors that determine if any activity is a business or not- 
Viability of business: It is important to check if the activity which is carried on is done in a way 
that is commercially viable and is it done for commercial reasons. Doing something which is 
accidental or is not a planned and persuaded act is not a business activity. Example would be like 
when one is willing to start a business he certainly plans for it and does some acts of the kind that 
assure that he is willing to start the business.  
Profit Intent: One has to have the intent to make a profit or has a belief that he will make a profit, 
even if the same is unlikely to do in the short term. The one who is engaged in an activity to help 
himself, his family or others and there is no intent that he will make a profit will not be said to be 
doing business. 
Ferguson v FCT (1979) 9 ATR 873; 79 ATC 4261 – Fisher J at ATR 884: the venture as a whole 
had a commercial flavor, was conducted systematically and in a business-like manner. An 
activity may be a business, even if it is operated inefficiently by a taxpayer with limited business 
2 
 
skill –Thomas v FCT (1972) 3 ATR 165; 72 ATC 4094. Large-scale betting activities are a 
hobby, not a business –Babka vs FCT (1989) 20 ATR 125. 
Number of repetition: There’s usually repetition and regularity to business activities, although 
one-off transactions can amount to a business in some cases but generally there has to be some 
level of continuity.  
An isolated transaction may form the beginning of a business or may be a business by itself –
FCT vs Whitfords Beach Pty Ltd (1982). Business is usually characterized by sustained and 
regular activity –London Australia Investment Co Ltd v FCT (1977). 
Scale: Another determining factor is the scale at which the activities are carried out.

Task: This is a take home exam with a prescribed release date and only limited time to complete. You have been presented with a scenario (below) and after the fact scenario there are two (2) questions...

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